People start businesses every day. Some succeed quickly; some
fail right off the bat; still others percolate slowly and grow
gradually, one day emerging as bona fide success stories.

At some point, every start-up business owner needs a little
help-a few pieces of sound advice from professionals to help steady
a new business' sometimes shaky beginnings. But good
old-fashioned irony usually dictates that, just when they need it
most, small-

business owners can least afford to spare the time or the
expense to hire experts who can give them the advice they need.

Len and Greta Buffinton can identify with that. In August 1994,
the newly married Len, 32, and Greta, 35, started a mail order
catalog selling self-help, relationship and psychology books.
Admittedly, they weren't experts on direct mail, but they'd
done extensive research to determine whether there was a
substantial market for their products. They also determined whether
there would be enough subject material to keep the catalog
interesting and functional. In Len's words, they wanted the
catalog to offer books that were about "sensitive issues but
tasteful, helpful and not just quirky."

After deciding there were more than enough books to fill a
diverse catalog, the Buffintons settled on a name, Brown
Wrapper Bookstore, and a cover concept to match. Despite its
furtive exterior, you won't find any X-rated tomes in the
Brown Wrapper catalog-just reputable literature and
videos.

Designing their catalog would be no small endeavor-the
Buffintons knew that. So instead of taking on the responsibility
themselves, they hired a graphic artist to design the format and
handle all the pre-press arrangements. Greta wrote the copy; but
aside from that and offering a few layout suggestions, the
Buffintons let their designer do the rest. "We told her which
books should be in which category, and then we shut our
mouths," says Len.

The result was a 20-page black-and-white catalog, its cover
printed on full-color 100-pound stock bearing the appearance of a
package wrapped in brown paper and tied with string. A "Slim
Jim"-taller and wider than the standard mail order
catalog-Brown Wrapper was designed to be sent in the mail
without an envelope. The Buffintons printed 30,000 copies of the
first catalog at a cost of approximately 50 cents apiece.

In deciding who to mail their catalog to, the Buffintons
contacted a list broker who supplied them with three rosters of
5,000 names each. Unfortunately, mailings to these lists garnered
an overall response of less than half of 1 percent, which Len
characterizes as "just horrible." Later, the Buffintons
learned the list they'd bought was

8 years old. When confronted, the list broker told the
Buffintons there were "no guarantees." "That mistake
cost us a lot of money, time and effort," says Len. Lesson
number one.

Even as the Buffintons were putting their first batch of
catalogs in the mail, they were already beginning to suspect that
finding their target audience was going to be a difficult process.
That's why, in later mailings, they adopted the habit of
constantly testing small lists. Keeping track of the multitude of
lists began to pose its own challenge, so the Buffintons decided to
hire an outside company to handle database management. Lesson
number two.

As any budding entrepreneur knows, growth is a tricky thing.
Grow too slowly, and you miss the boat; expand too quickly, and you
may harm the business. After their first fiscal year, the
Buffintons' Brown Wrapper catalog had earned them
$200,000, and they were eager to grow the company, but they
didn't want to do anything they'd regret. They are as
cautious as they are enthusiastic-with a good balance of passion
and prudence. From day one, they and their five employees have
handled fulfillment in-house, stocking inventory in a
3,000-square-foot warehouse adjacent to their Old Saybrook,
Connecticut, commercial office. Lesson number three.

The Buffintons have made some mistakes, but they've also
done a lot of things right. How can they improve on their success
and make their burgeoning business grow even more? For some sage
insight and advice, we've sought the help of a few experts.

Zeroing In On Your Market

Obviously, mailing to outdated addresses isn't the best way
to reach your target market. Finding a savvy list broker and
sticking with him or her is. "[Using] one good list broker is
a very good policy," says Maxwell Sroge, owner of Maxwell
Sroge Co. Inc., a mail order consulting firm in Evanston, Illinois.
"The broker learns which lists work well for [your company],
and that knowledge is very valuable." This doesn't mean
keeping the first broker you try; it simply means once you find one
you feel confident with, stay with that person.

That's what the Buffintons eventually did. After their
initial bad experience, they obtained the name of a list broker
with a reputation as "the guru of mailing lists." But,
Sroge adds, "you can never sit back and say 'It's
over; we've done it. The list is complete.' " Over the
last 10 months, the Buffintons have tested 15 or 16 different
lists, each bearing some 5,000 names.

Even large, well-known mail order companies aren't exempt
from the need to continually test new lists. "L.L. Bean,
Land's End and Spiegel rent lists," says Don Chilcutt,
owner of Chilcutt Direct Marketing, a mailing list selection and
management company in Oklahoma City. "They've got to
constantly feed the pot because some of last year's buyers
won't buy again."

If there's one thing the Buffintons couldn't have been
more right about, it's the concept of continual change-both in
testing mailing lists and in tinkering with their product mix to
meet their customers' needs. The Buffintons believed from the
outset that if customers wanted something, they'd better
provide it.

For example, when customers said they would prefer to receive
the Brown Wrapper catalog in an envelope, the Buffintons
listened. The second catalog, a 32-page full-color booklet, was
mailed in an envelope. And when customers said they would be
interested in a series of relationship videos, Len found some and
included them in the catalog.

A few months into the business, one thing surprised the
Buffintons about their market: It was 65 percent male. With the
Brown Wrapper catalog teeming with books like Get Married
Now and Men Are From Mars, Women Are From Venus, they'd
expected most of their customers would be women. So the Buffintons
slightly altered their marketing plan by concentrating less on
female markets and more on those that were nongender-specific. Len
says this taught them a valuable lesson about flexibility. "In
mail order," he says, "the successful companies are the
ones that find a new angle or market they didn't think was
there."

Chilcutt says offering your customers endless opportunities to
buy from you is the best way to ensure continued patronage. He
calls the practice a "continual massaging of your customer
list"-and the Buffintons are already doing it right. Soon
after they began mailing the second catalog, Len began putting
together a "jazzy" response package that rewarded
customers with a free book. "If you believe in your
product," says Len, "making an offer isn't so
daring."

Head Count

There are numerous variables in mail order, but the one constant
is that running a mail order business means finding a way to manage
a multitude of names and addresses. Smart, consistent database
management from the outset is a crucial ingredient for success.
That's one reason the Buffintons decided to outsource Brown
Wrapper's database management duties.

John Schulte, chairman of the National Mail Order Association,
believes the Buffintons made the right choice. He says a lot of
small to midsized companies hire a service bureau when their list
gets beyond 5,000 names because at that point, managing a database
becomes too complex.

"When you're developing a database from scratch, deal
with a professional," says Schulte. "From the beginning,
all your information has to be standardized so it's
consistent." This includes uniformity of basic information,
like address abbreviations, as well as knowing what additional
information you want to collect regarding the people on your lists.
As Schulte points out, such decisions require careful, deliberate
planning at the outset.

"To determine what data they want to capture now, [mail
order entrepreneurs] have to think about what they want to do in
the future," says Schulte. When, what and how much a customer
has bought are important tidbits to cull; date and purchase details
of their first inquiry or order are also helpful. However, the most
powerful piece of information you need is the source of the inquiry
or purchase (which mailing list did the name come from or what
advertisement did they respond to?).

All this can be somewhat mind-boggling if database management
isn't your forte-and most mail order entrepreneurs start their
businesses out of a love for their concept, not because they're
dying to contend with humongous databases. "There are so many
other things for an entrepreneur to think about," says
Schulte, "it's best to have professionals helping you in
certain areas."

Room To Grow

No matter how much guidance you get when starting a company,
nothing can make or break your business like your own decisions. In
mail order, this lesson is especially important. Because their
catalog has been successful so far, the Buffintons are considering
seeking venture capital to expand the business. "We're
definitely looking to grow," Len says. "But at what point
do you consider bringing on venture capital to take that next step
in the marketing plan?"

Maxwell Sroge doesn't believe Brown Wrapper needs
venture capital to expand. He says he has nothing against venture
capital groups but warns, "You have to give away an awful lot
of your business to bring them in." Instead, he suggests the
Buffintons continue to mail small quantities, building their
retained cash, and gradually increase quantities as they learn
which lists work and which don't. "I would hold off going
after venture capital groups for as long as possible," says
Sroge, "because it's the most expensive money you can
borrow."

In addition to sticking with small mailings, Sroge suggests
going back to previous customers time and time again. "The
fastest way to make money in the catalog business is to mail more
frequently to your known customers," he says.

Schulte and Chilcutt agree. "You can't neglect the
customers who have already paid you money. They've already
proved themselves," says Schulte. "Your in-house list is
the most valuable. You should create new offers to sell to these
people. Direct marketers are not necessarily concerned with the
first sale but the second and third. That's where a lot of
[business owners] miss out because they don't think about
cross-selling or any other type of selling to their house list as
much as they should." (See "Returns to Sender" on
page 124 for more on cross-selling.)

The experts agree that keeping Brown Wrapper's
fulfillment in-house is an inspired idea. "There's nothing
better than talking to customers yourself," says Sroge. Using
an outside service is fine for huge mail order companies, according
to Sroge, but he urges the Buffintons to continue to handle
fulfillment themselves because "nobody will ever take better
care of your customers than you."

Take It Under Advisement

According to the experts we consulted, the Buffintons are on the
right track-and they have 18,000 customers on their house list to
prove it. Cautious growth seems to be the best course of action.
For the foreseeable future, Brown Wrapper's fulfillment
will be handled in-house, and database management will remain an
outside job. Meanwhile, Len recently streamlined the business's
operations by setting up a live 24-hour ordering service.

Other than that, the Buffintons seem to have found a formula
that works for them. They're already heeding the advice of
veteran Sroge: "Stay with your game plan-and even when you get
bored with it, keep doing the same thing. You may be bored, but
your customers certainly aren't."

Returns To Sender

"The fastest way to make money in the catalog business is
to mail more frequently to your known customers," says Maxwell
Sroge, owner of Maxwell Sroge Co. Inc., a mail order consulting
firm in Evanston, Illinois. In addition to that advice, Sroge
offers the following pointers to mail order entrepreneurs who want
to beef up their profitability:

1. Create packages, and offer them at a savings. Put together
bundles of related products, and sell them as a package at a
discount.

2. Up-sell or cross-sell. When a customer is on the phone, try
to increase the volume of the order. This is called
up-selling-offering a special on two or more products of a similar
type. Another idea is to try to sell related products to the
customer (this is known as cross-selling). "Once somebody is
on the phone and you're doing business with them, it's
usually easy to move them into another category," says Sroge.
"It's the same telephone call; it just takes a few more
minutes."

3. Ask suppliers to pay for space in your catalog. Also known as
co-op advertising, this can be a great way to make printing your
catalog mutually beneficial to you and your suppliers.

5. Offer bonuses for large orders. Reward customers who buy in
bulk with bonuses (this might include discounts or additional
merchandise). After all, by purchasing large quantities of your
products, they rewarded you first.